From the Colombian Federation of Games of Chance and Luck, they joined the criticisms of the Colombian Association of Game Operators, against the project.
Colombia.- Colombian Federation of Games of Chance and Luck (Fecoljuegos) expressed its rejection of the tax reform promoted by the Colombian government, which, among other points, proposes the creation of a 19 percent VAT for online betting.
Through a statement, the organization expressed its concern about the proposal of the Third Commission of the Senate to impose VAT on online games and assured that "a tax now would make the online gaming sector unviable" in Colombia.
According to Fecoljuegos, this activity, for seven years, made Colombia a pioneer in regulating online gaming, which led to a formalization of the activity.
"It was an activity that did not contribute to public finances or the health of Colombians. Since then, 15 sports betting platforms have signed an operation contract with Coljuegos (an entity attached to the Ministry of Finance and in charge of managing the monopolistic rent of games of chance and luck) and consolidated a legal industry in the country," stated Evert Montero, president of Fecoljuegos through the statement.
Also, from Fecoljuegos, they pointed out that online game operators, already suffer from high operating costs and explained that "they operate in Colombia through a scheme of high costs and intensive investment in technology, where the return to the player amounts to between 90 to 95 percent of the bets and pays about 20 percent in exploitation rights which are later transferred for the health of Colombians, in addition to other taxes such as income and others."
In that sense, from the organization, they affirmed that a new burden would leave them breathless to help move the economy and, mainly, to contribute to health, since this type of activity puts part of the financing of the system.
See also: Colombian lotteries increased by 25% the transfers to health funds
On the other hand, in the statement, Fecoljuegos referred to the effect that the implementation of the tax could have on employment, since, according to the statistics presented by the federation, the activity generates more than 150,000 jobs between direct and indirect among online game operators and other companies that are part of the value chain, where many are vulnerable population, single mothers, diverse population or with disabilities.
In the complaint, from Fecoljuegos they alerted the absence of the State in the control of illegal sites: "The sector currently faces a growing phenomenon of illegality. There are numerous betting platforms that do not have authorization from the regulator, affecting not only the security of the player and public finances but also competing unfairly with the 15 legal platforms," they stated in the letter.
In that context, from the federation that brings together operators, manufacturers, and affiliated suppliers, they assured that "taxing a sector that already records high costs, that has survived despite the high phenomenon of illegality and that has numerous taxes makes the activity completely unviable."
They also warned that, if the proposal that was announced as part of the tax reform is approved, it would mean "not only putting at risk the jobs of more than 150,000 people in Colombia but also the contribution of more than COP400,000m in exploitation rights for the health of Colombians, not to mention other taxes such as income."
It is worth remembering that when the news was known, Juan Carlos Restrepo, president of the Colombian Association of Game Operators (Asojuegos), said that the tax would be directly passed on to the consumer, who today has a return of between 90 and 95 percent, which means that of every peso bet between 90 and 95 cents return to the public bettor, and if the tax is applied it would be about 78 percent approximately.
"Bettors would prefer to bet on international platforms that do not charge VAT and guarantee the same return that they currently have with the companies that offer the entertainment service in Colombia. Those resources that are currently collected for health would go to companies that neither pay taxes in Colombia nor operate legally in the country," added Restrepo.
